getting into hedge funds w/o a econ/finance background

hi all, been reading around and i’m deliberating whether to take level 1 cfa to get into finance then HFs. but my question is, is this a good/great route to take? what are the other options out there?? i grad w/ a biology degree and don’t have a finance background so it’s been difficult to figure out how to get into a prestigious, well-run HF. i’ve been trying to get feedback from others and scouring this site and others for info and this is what i got: - apply directly for jobs in HF or finance in general. seems like right now is not a good time for this. - get mba. looks i can’t get into top 10-20 w/o great exp. etc, so this looks dead. -get ms in fin. down-side is the huge expense, i.e. uni’s cash cow. if some ppl say it’s worthwhile and i should look at it again, i will. whatever other options that you think is good, please share. and if cfa is still worth pursuing to get a foot in the door; i realize from other posts that the cfa WON’T guarantee me a job. i fully understand. also, bromion, if you’re reading i hope you can give me some insight. you’ve got really prudent and relevant advice as seen from your previous posts.

just brainstorming here, but perhaps you can take L1 then try to get a corporate finance analyst job for some biotech/pharmaceutical company by playing the bio degree card in addition to the interest in finance and take it from there once you get some years of experience. HF directly highly unlikely

What do you want to do for the hedge fund? There are so many different jobs in “finance”. If you want to be in investor relations, all you need is a good personality. Otherwise, further education is your best hope, particularly if you don’t already have high academic pedigree. Good luck, in any case.

Well HFs seem to offer a lot of tools that can be used, relatively speaking, in finance. Rather agile as an entity, no? I don’t have a great pedigree and going to school seems a bit difficult b/c I would be at a disadvantage given my background. Hence my idea for a cfa. The biotech route was something I was considering and looks like a possibility. Thanks to the responses so far.

If you start the CFA process, you’ll at least get an idea of what investment analysis is about and will be able to talk the talk. It won’t be enough all on it’s own, but it will go a long way to getting you started. And yeah, take a look at biotech and pharma companies… read some investment research on them (you may have to pay a bit for a sell side report from some place), and then see if that’s something you can see yourself writing or analyzing.

neofinance Wrote: ------------------------------------------------------- > also, bromion, if you’re reading i hope you can > give me some insight. you’ve got really prudent > and relevant advice as seen from your previous > posts. There basically three ways to do it: 1) Know someone. Not much to say here, it is what it is. 2) Get on the track early, go to the right high school, the right college, get the right internship, etc. This has been beaten to death, so I’m sure you know this story. 3) Everyone else. Personally, from what I have seen, this is a very small group because there aren’t that many jobs, and 1) and 2) usually soak them up pretty thoroughly. I can tell you what worked for me, but you or anyone else won’t be able to replicate it because it is so far removed from the normal track and involved so many random coincidences aligning just right that it would be impossible to intentionally take this track (not that you would want to anyway). I come from a very difficult background and had no chance to get on the silverspoon track. I’ll spare you the details, but suffice to say that my family was literally living out of a car at one point. So I had a bad start, but I have three qualities that helped me get into and succeed in finance: the ability to read people very well, inherent hustle (in both senses of the word), and perserverance. At any rate, I came up with some pretty creative ways to make enough money to put myself through a state school, and graduated with a B.A. in English Lit. I actually wanted to be a teacher originally, and didn’t even know what Wall Street was (I didn’t take a single finance, accounting or econ course in college – not even one). After I taught overseas for a while, one day I accidentally came across an article about hedge funds and thought it sounded really interesting, both the game and the money. So I set about trying to find any job that I thought could lead me to a hedge fund position, and happened to find a position in the research department of a brokerage firm in a small market city. I got the job because it was off hiring cycle (Feb instead of June), and they needed someone right away, and because I can write well. I knew absolutely nothing about finance, but I could write a hell of a report, and the manager of the department connected me with an analyst as a mentor to help me fill in the numbers and learn. Over the next ~2 years I passed the three CFA exams 3/3 and read about 30-40 books on finance, accounting and econ. I also realized that I have a real talent for getting managers of companies to open up over the phone (the hustle) and understand what they are actually saying as opposed to what they think they are saying (many of them lie, exaggerate and generally try to gloss over the important, difficult details – the key is to be able to effectively see through the “story” to the underlying reality). I cannot emphasize enough that someone who is merely book smart and not street smart will fail at this career. You need both to succeed, and if I had to pick one, I’d pick the latter. About this time, I realized the sell side wasn’t the real game, and applied to b-school. I got waitlisted at 3 or 4 of the top 5 schools (2008 was a bad year and I think my background was too unusual to get a serious look). So I started to look at the buy side – it seemed impossible to make the move since every post said must have gone to X school and have an MBA, etc. which I didn’t have. I got no love on the recruiting circuit, either. But I hustled hard and didn’t give up, and after over 100 job apps, ended up getting an interview at a hedge fund for a “temporary research position.” As I later learned, the temp position posting was actually a ruse to ferret out the hungriest applicants – people willing to move across the country for just a chance at an analyst role at a hedge fund. Turns out it was actually one of the best hedge funds in the country by long-term track record (it’s fairly small and super low profile), and the manager has a background somewhat similar to mine. After 8 interviews (like trying to get into the CIA!), I got the job. However, several others “got the job” as well, and it was basically a shark tank to see who wanted it the most – the other 3 got fired or quit within the first 12 months. I got moved up and run the research department after 2 years – I do all the primary research for the firm, from channel checks, to phone calls, to site visits, you name it. The only person above me is the PM. My favorite “moment” in my job is meeting a new CEO or CFO for the first time and watching their face as they realized that “I’m it” – there isn’t an older guy from the team joining us for the meeting, I am the guy – and then I proceed to kill it in the meeting. Love it. I have no Ivy League degree, no MBA, no BBA in finance – nothing. It’s all hustle and heart. As you can see, this is not really an actionable course that you could follow. I got lucky, and have the right talents, and basically just rubbed two sticks together until I got a spark. I posted this story to hopefully inspire you, and to underscore the most important piece of advice anyone could give you about getting into this field or completing any other challenging task: never, ever quit no matter what. However, I would encourage you to think about what you really want. Why do you want to get into a hedge fund? I make a lot of money, and I love what I do, but the sacrifices to get here were horrendous. I can honestly say that I’m not sure I would do it again, because there is a lot more to life than making money and staring a computer screen 12-15 hours a day 5-6 days per week. For a while, I was working 7 days a week at that pace to try to make the cut. My health really went to sh!t, and I lost some relationships that in hindsight were very important to me. So I made it, but at what cost? Would that be worth it to you? What are your real priorities? If it’s just money and prestige, I would say don’t do it. If you think you would really love the stock market game (which is why I’m sticking with this), then I would say maybe. Just remember, a key part of finance is the cost / benefit analysis. I’ve seen people personally make $50 million dollars in one week, and I’ve seen people make a fortune and retire in their early 30s. But what’s the point if you destroy your life in the process? Just saying think about it.

You have my respect, bromion: forr your persistence, work ethic, and ability to look back on it and give the nuance to “was it worth it.” Kudos to you, my friend.

thanks again everyone for posting so far. i appreciate it a lot. @bromion i seeked you out and i got rewarded with riches. if we met, then maybe we would both realize how similar we are. i graduated actually w/ both biology and philosophy degrees but didn’t think i needed to mention the philosophy (anyways, humanities ppl do get into finance!). poor family, mid-to-low tier state school, not one econ or finance class as undergrad. opened my first intro econ book at 24, which was last year. always had dreams of being a doctor, from age three to couple years after college, but a strange epiphany out of one ordinary, mundane day said it wasn’t the right way. not even w/ research on the side, i.e. MD, PhD - a medical scientist. after having my world crumble a bit, i planned my next moves. law? b-school? academia in science? … finance? what? even though growing poor, i never “felt” poor b/c my parents protected me from that. not as devastating as you bromion, but poor enough to be under the fed poverty guidelines. but i always “knew”, somehow oddly enough, that i’ll be well-off (never owned stocks at five or did lemonade stand but some unexplainable inner confidence). however, oddly again, i hated ppl who are filthy rich and so never thought of business or finance because of that. the greed associated with finance turned me off. but i realized i was playing the wrong game if i went into medicine or academia. there wasn’t any “real” influence, like being a senator or president. so why HFs and not government? well government is the end goal, and a job in finance is the means. HFs, at least the few things i’ve read, seem to reward those with a holistic perspective; how government policies, technology, advances in math and science, and patterns of societies, groups, and individuals and host of other factors may bear upon the value of a bond, commodity, etc. and exploiting that analysis for gain. that’s why i’m enamored by HF’s absolute return policy compared to mutual fund’s relative return. absolute return leaves no room for copping out; relative return seems to be a poor excuse for not trying hard enough, i.e. “the top kid in my class got a 78% so getting a 74% isn’t bad!” type of mentality. and you get to go wherever your mind finds value, or lack of, that can be used for gain. that to me is exciting: knowing that in good or bad times, money can be made and usually the truly smart ones come out on top. medicine and academia by nature is very narrow minded, albeit great in depth, but for me, i want both worlds. like you, i have an ability to read ppl, and may be able to be very convincing if given more situations where i needed to be. i’m passionate, fun-loving, yet also polite, very aware, and a deep skeptic at heart. even though i never stepped into a finance job, i know i have the core talents needed to be successful. in many ways, i ALREADY know i’ll be successful in finance, and that i will end up in a HF. some may see this as arrogance, but to me, if someone asked who i was, this is what i’ll give them cause i know myself and am comfortable with whom i am (i have a very loving mother :wink: ). and finally, what is “success” to me? is success merely money? is this why i want to be in hedge funds, simply for the money? in short, yes. but let me explain. as i said before, growing poor may have revealed to me the reality of my status, but never in my mind have i ever felt this was gonna be like this forever. poverty, as i see it, is merely a “stage” waiting to be passed. so unlike those growing up poor and being obsessed with being rich, e.g. rappers and like, i could care less how i spend money on myself. that’s right. neofinance, if he was a billionaire tomorrow, would NOT buy a rolls and hundred room house. he would give all but $150-200k to those who really need it. and that $150-200k would be used to raise my family and take care of my parents and whoever else needs money in my family. money for money’s sake is not what drives me, and sure wouldn’t drive me to take even cfa level 1. so what drives me? being able to make a difference with that money. if virtually all billionaires hoard wealth (i mean is donating 1-2% of net worth really being generous??), then why can’t i be filthy rich and give it away in a way that is responsible, efficient, and effective? being a doctor or scientist rarely, if ever achieves the things ppl w/ money can. that’s reality and i accept those facts. some ppl say that if they can make one life better, then their life was worth living. sounds nice but a bit selfish under the layers. how about a person who has been given the talent to help 1000 ppl but decides to only help one person? does this satisfy those people’s sort of quasi-principle that this sort of life was well-lived? how about talent to help a million? billion, even? but only if one life is bettered, then that’s all that matters? bull. i know my talents and those talents can best be realized in finance. even further, in a vehicle that allows me the greatest freedom and vast arsenal of techniques/strategies to accomplish the goal of absolute return (all w/in ethical bounds). and to use any less of all my talents would be great disservice to those who need a helping hand so that one day they can stand on their own and make it. money and prestige? i’m already bored of that and i don’t even have any! how can i be bored w/ something i don’t have? cause i already anticipated what it is probably like by viewing those who are rich and famous and i could care less. i care about ppl and that’s what’s gonna get me in. b/c i will never take ‘no’ for an answer when i already know finance is where i belong. i looked everywhere, at all sorts of applications and run through the gamut of possibilities of medicine,law, and academia yet finance has taken a hold. i realize the potential it has for good. bromion, i understand that your story is rare, and may not be duplicated, and i really thank you for sharing with me. and in truth, the last paragraph made my eyes a bit wet cause isn’t that really the heart of the matter - why i’m doing this? anyone for that matter? you’ve been honest and direct, and your post has been refreshing. one day i hope to meet you, and maybe it’ll be looking in a mirror.

Dayam bromion. Why didn’t you post in my rags to riches thread?! bromion -> I totally understand what you’re saying. I know for me it’s due to my survival mentality that I’ve been able to move up. It’s either you die now from hunger or work to death avoiding it. Absolutely no room for failure and usually you only get one shot to advance. The whole notion that you should get a job that you love was complete falsity and a privilege enjoyed by those that can afford it. To me, a job meant you get paid money and you give it your all, including massive time and effort without consideration of whether you “like” it or not. Regarding losing relationships and cutting out / making sacrifices at a young age in exchange for career growth, I am totally with you here. Sacrifices have to be made in order to succeed, and I care about my livelihood and avoid living on the streets rather than my social life. I also think that success at a young age is an indication of sheer cunningness because it’s hard - especially if you did it without connections. Like you said, street smarts is integral especially when reading people. I found that reading people, communication skills and ability to master different tasks with limited time and resources to be indispensable. For me, it came with knowing how to spot danger out on the streets and if someone was trying to B.S. you. However, a different ability that is not obtained by most is the art of learning and teaching. When you’re competing with top-notch students that get extra help and superb education while you have absolutely little to no resource in education, you struggle… a lot. Once you master this struggle, you’re good to go. All these things come at a high price because you have to endure some real tough situations in order to develop these skills - situations that you would never willingly endure. I can count on my hand how many people I know that truly went from rags to riches. Most people with riches were at least middle class or rich to begin with. I’m pretty impressed with your qualifications. Mine haven’t materialized fully but they’re decent enough for me to be content. To answer the OP -> It’s very rare unless you have connections and/or seem like a genius. Also, even to get an interview, you probably have to get your foot in the door through free internships. You know what I find is very ironic - there are so many HFers on this board… why can’t they interview you! LOL Network on this board. It also helps if you have a friend in the industry.

Great post bromion! Helluva story. Now where is that quote about persistence… aha here it is, actually have a few: “Education will not (take the place of persistence); the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘press on’ has solved and always will solve the problems of the human race.” Calvin Coolidge “Persistence is the twin sister of excellence. One is a matter of quality; the other, a matter of time.” Anon “Permanence, perseverance and persistence in spite of all obstacles, discouragement, and impossibilities: It is this, that in all things distinguishes the strong soul from the weak” Thomas Carlyle “What do you first do when you learn to swim? You make mistakes, do you not? And what happens? You make other mistakes, and when you have made all the mistakes you possibly can without drowning - and some of them many times over - what do you find? That you can swim? Well - life is just the same as learning to swim! Do not be afraid of making mistakes, for there is no other way of learning how to live!” Alfred Adler “The most essential factor is persistence - the determination never to allow your energy or enthusiasm to be dampened by the discouragement that must inevitably come.” James Whitcomb Riley

BROMION !!! This easily belongs in the top 5 posts I’ve read here on AF. Very inspiring. And intelligent.

Great post bromion. Neofinance: I will skip most of the stuff said already. 1) Randomly break yourself into any front-office type job similar to how Bromion got his initial shot. This is the most difficult option, but does have the least time/dollar commitment. After you get some experience, you would have a shot. This does not include corporate finance roles(I will get to them later). 2)Try for a top 5 full-time MBA. You mentioned this was not really an option, but you also seem to realize it is a good way to get in. This one is obvious. Huge dollar commitment, but you get a decent shot of breaking in. Add the CFA to improve odds further. 3)Full-time non top 5-10 program. Preferably something near some hedge funds. At least within driving distances. Definitely take the CFA Exams under this scenario. It will help even out your MBA/MSF program. Corporate Finance - I crossed this off in step 1 because you simply wont just jump from Corporate finance directly to an HF without help. I had to get an MBA(part-time), CFA, and work the corp. finance role to get myself where I wanted to go. The positive with this option is you have an income, but you still may never get that job you always wanted(Bromion perseverance required). It worked for me…

srwarrington -> How was part-time MBA? (I’m assuming you worked full-time and took night and weekend classes?)

srwarrington Wrote: ------------------------------------------------------- > Good post. I would just be wary of using the term “difficult” when describing various courses of action. Difficulty implies that something can be done with extreme effort or talent. In reality, and like you later alluded to, even the best efforts only give you a probability of success. Thus, optimal career choices depend on risk/reward, in addition to money investment/reward and effort/reward.

Thanks again everyone, and glad that a nugget of wisdom was pulled in the process. B-school doesn’t seem even remotely as an option at this point. As far as I can gather, high quality work experience is a requisite for the top schools. So going to a lower tier school doesn’t help and may even hurt my chances of getting into a HF. And I am a bit confused about the biotech/pharm corporate finance angle. I guess people here have conflicting views on this approach? Right now, my current line of thinking is to take and pass CFA level 1 to demonstrate to my future employers that I am seriously committed to finance. So finding the right “employers” is obviously important to be on the right sort of track. But is this the way to think about things? I am still curious if the CFA is right for me…

Well put Ohai. That is what I was attempting to convey. Ocean mist: I took the part-time MBA at night for approximately 2.5 years. It was 52 credit hours. I think choosing the right part-time MBA is everything. We had room for 6 electives which was easily the best part of the program. I loaded up on everything finance, and even used a research report I had prepared during an interview. I would suggest researching the offered courses and specific finance professors. They will usually be more then happy to sit down with you and explain what they can offer. If you are not impressed, I would not attend… Neofinance: My decision was simple. It is relatively inexpensive and improves your chance of breaking into the industry. SOLD. The next decision is to figure out what else can help improve your odds even further. Corporate finance simply offers a fall back option to help improve the expected value of an MBA(have to consider all variables…)

@srwarrington I understand the MBA will help my chances getting into a HF, but my question is what do I do in the meantime to position myself to apply to the best B-school? What sort of entry-level positions should I look for if I pass levels 1 and 2? Also, wouldn’t I have greater clout in my job search for a bit more advanced role compared to a jr. analyst if I pass level 2. Or is this being too optimistic?

I am not an expert on how to get into the top b-schools. I am sure someone else can offer much better advice in that area(probably a similar website dedicated to that…) Passing a couple of levels should help improve your odds of breaking into some analyst position, but I would be surprised if it actually brought you in at a higher level. I doubt there are many ways to go in as anything other than entry level until you prove yourself. Others can probably elaborate on this topic, but that is my opinion. If you are serious about breaking into the industry, I would begin studying…

neofinance Wrote: -------------------------------------------------- > Also, wouldn’t I have greater clout in my job > search for a bit more advanced role compared to a > jr. analyst if I pass level 2. Absolutely ! I am surprised at the overall tone in this thread. Can someone please be honest with the guy? Great post Bromion, good story, how old are you ?

its not just work experience that gets you into top b-schools, and it does not have to be finance related.